Live streams

EU, China Stumble Toward Solar Trade War

FILE - Employees examine newly-made solar panels before boxing for shipment at a factory of Yingli Solar in Baoding, Hebei province, August 2, 2012.

US-European Free Trade Talks To Begin Soon

TEXT SIZE - +

Reuters

February 21, 2013

BRUSSELS/BEIJING — China's leadership transition is complicating talks to resolve a multi-billion-dollar dispute with the European Union over solar panels, pushing both sides closer to placing punitive tariffs on each others' exports and risking a trade war.

The newly-appointed chief of China's Communist Party Xi Jinping is set to take over the presidency at a national congress in March. But the full line-up of government officials is not yet in place and China's current commerce minister is likely to step down after what some have said was a political snub at the party's congress in November.

EU leaders want to avoid following the United States' decision last year to impose duties on Chinese solar power products, aware that Europe needs China to help it emerge from three years of economic crisis.

But EU officials and diplomats say they have made little progress, accusing the Chinese of "stonewalling," and are unable to get beyond the outgoing commerce minister, Chen Deming. They complain of a limbo in the ministry that will not end until after the March congress.

"There is no clarity on what the new leadership thinks about trade," said a senior EU official involved in talks with China. "They are stonewalling and the window of opportunity for a solution on solar panels is closing."

China's commerce ministry spokesman Shen Danyang told reporters in Beijing this week that officials are "conducting consultations and relevant response work with the concerned parties," but did not comment on any impact China's leadership transition is having on negotiations.

Germany, the United States and China are the world's biggest solar markets and companies are in a race to win contracts as countries seek to limit pollution and global warming.

In a non-binding vote, EU countries approved on Wednesday a request from industry to register solar panels from China, which would allow for retroactive measures if the European Commission agrees to registration and does impose duties.

But the Commission, the EU executive, denied on Thursday that the decision by member states signalled Brussels was closer to blocking Chinese solar products. "Let's not interpret this as suggesting anything - it is simply administrative procedure," EU trade spokesman John Clancy said in a statement.

Race Against Time

European solar panel manufacturers, led by Germany's Solar World, accuse their Chinese counterparts of receiving state subsidies to flood the EU with panels sold below cost and putting Europeans out of business to corner the market.

The Commission launched an investigation last September into Chinese solar panels, the biggest import sector it has ever targeted. China exported more than $25 billion worth of panels to the European Union in 2011.

Highlighting the risk of a trade war, Chinese solar companies also accuse the European Union of wrongdoing.

China says Europe illegally favors it domestic solar panel producers and Beijing is considering its own duties on EU exports of polysilicon, which is used to make solar panels.

FILE - Employees carry solar panels at a solar power plant in Aksu, Xinjiang Uyghur Autonomous Region, May 18, 2012.

Complicating things further, some European distributors and installers of Chinese panels say EU tariffs on China would be damaging for Europe's efforts to develop clean energy. They say solar energy is only efficient using Chinese products that are up to 45 percent cheaper than those made in Europe.

"Even without the [leadership] transition, this is a very difficult issue,'' said Scott Kennedy, director of the Research Center for Chinese Politics and Business at Indiana University. "I really don't see a negotiated outcome."

Time is of the essence because many expect Beijing to make a decision on polysilicon duties as soon as the end of February.

The EU's investigation must culminate in a decision by June.

In reality, that is likely to come by mid-April, when diplomats from the EU's 27 countries make their recommendation to the European Commission, which is handling the case.

Such a timeframe does not give a new trade minister in Beijing much time to get acquainted with the issues and reach a settlement. EU Trade Commissioner Karel De Gucht said there is no chance of tweaking the investigation's deadline.

"They know exactly what it is about, the solar panel case. We are consulting them, it is up to them," De Gucht told Reuters. "You cannot have something like a prolongation of that period because there is a transition in China."

In the past four years, the Commission has only chosen to end one trade defense case in China without imposing duties.

You May Like

FILE- Unmanned Predator B drone, taken November 8, 2011.

Pakistan Reiterates Opposition to US Drone Strikes

Day earlier US President Barack Obama justified 'constrained' drone usage to save lives More

Authorities are taking samples of live poultry from mainland China to test for the H7N9 virus, April 11, 2013.

Study Identifies Risks of Human Spread of H7N9 Bird Flu

Study suggest that international measures to contain the H7N9 influenza, in the event of severe outbreak, will need to be targeted in Asia More

Anti government protesters burn tires and place rocks in the streets in Conakry, Guinea, May 3, 2013

Violence Continues in Conakry Over Upcoming Elections

Opposition has called for boycott of elections More

Syria's Civil War Fuels Violence in Iraq

Analysts say al-Qaida-linked militants are flowing back and forth from both countries More

Star Trek Influence Lives Long and Prospers

As new movie thrills, many are once again discussing the iconic franchise's influence on society, science and technology More

A view of Badong city on the banks of the Yangtze River, in Hubei province, China, August 7, 2012.

OECD: Developing Green Cities Key to Sustainable Future

OECD suggests strategies to mitigate rapid growth, industrialization in urban centers, which produce about two-thirds of greenhouse gas emissions More

This forum has been closed.

Comment Sorting

Comments

by: Ian from: USA

February 22, 2013 5:48 PM

Report Comment

"Complicating things further, some European distributors and installers of Chinese panels say EU tariffs on China would be damaging for Europe's efforts to develop clean energy. They say solar energy is only efficient using Chinese products that are up to 45 percent cheaper than those made in Europe."
it is the same excuse Walmart used . You save 45% but the hidden cost of european workers losing jobs may be higher than 45% !

by: JKF from: Ottawa, Canada

February 21, 2013 11:20 PM

Report Comment

Tarrifs/duties are the only way to deal with producers, that do not work from a level playing field; and more importantly to protect home producers from an unfair business practice(s). But the money collected must go to the producers, as compensation...will it?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.

Video

Volunteers Help Revive LA's Concrete River

The Los Angeles River is a concrete drainage channel through much of its 80-kilometer length. It channels waste-water from storm drains and has become a receptacle for much of the city's trash. But as Mike O'Sullivan reports, the river is slowly being restored with the help of volunteers, who take part in an annual clean-up.